A former U.S. broker has been charged with allegedly running a Ponzi scheme that promised investors high returns from various investment vehicles, including principal-protected notes and promissory notes.
U.S. authorities alleged that between September 2022 and November 2024, with the help of a network of insurance brokers, Paul Regan — the founder and CEO of Next Level Holdings LLC, and chairman of registered investment adviser Yield Wealth Ltd. and a related unregistered firm, Yield Capital Management — raised more than US$63 million from investors through the sale of securities issued by Next Level and Yield Wealth.
According to an indictment unsealed in a federal court in New York, Regan defrauded investors by misrepresenting the planned use of their money and the investor protections that the purported securities provided.
While the notes promised returns generated from precious metals investments, the indictment alleged that the notes were part of a Ponzi scheme, using money from new investors to pay “returns” to early investors.
In a second scheme, notes issued by Yield Wealth allegedly offered term deposits to investors that also promised returns from precious metals and investments in health care policies.
Ultimately, after the schemes collapsed, investors were left with over US$50 million in losses, authorities alleged.
Regan has been charged with conspiracy, securities fraud, wire fraud and identity theft. In a parallel case, the U.S. Securities and Exchange Commission (SEC) also filed civil fraud charges against him.
None of the allegations have been proven, and he is presumed innocent of the criminal charges.
According to the SEC, Regan was registered as a broker with five different firms between 1999 and 2002. In 2004, he was banned by FINRA for failing to respond to a request for information.
The regulator also reported that in 2017 he pleaded guilty to fraud in connection with the sale of notes that promised guaranteed returns. In that case, he was sentenced to probation, which ended in 2024, the SEC said.